Weighing up IT options

12 December 2012

The dilemma of dedicated WMS versus
existing ERP system continues to provoke
debate but does the choice need to be
contentious, asks Steven Hargreaves,
group product director, Solarsoft
Most enterprise resource plann

The dilemma of dedicated WMS versus
existing ERP system continues to provoke
debate but does the choice need to be
contentious, asks Steven Hargreaves,
group product director, Solarsoft

Most enterprise resource planning (ERP) applications
already offer basic warehouse management capabilities,
so the IT manager's preference is often to work with
what's there, even if this means additional spending on an older
and possibly outdated system.

The alternative is to install a specialist warehouse management
system (WMS) that will directly support the operations manager's
plans for improved work practices. The challenge, however, is
persuading the IT department to approve and support yet
another software application.

Longer term, a new ERP system could
be an option. But when owners are
anxious to see quick results, the decision
often comes down to this: buy best-ofbreed,
or make-do and mend.

Focus on simplicity
There is an obvious appeal to keeping the
IT portfolio simple and working with
fewer technology providers but there are
commercial risks if systems are not up to
the job.

ERP's strength is in the robust integration of transactions
across business functions.Modern ERP systems provide
comprehensive management for operations from sales and
purchases to inventory keeping and financial control.

Manufacturing and shipping may be handled too but many
general-purpose ERP systems have limited support for operations
outside the back office.

For the warehouse manager, then, the ERP route can be
restrictive. Off-the-shelf, ERP software typically lacks the task
allocation and scheduling logic needed to optimise movements.

Nor will it handle the advanced barcode scanning, voice-picking
or integrated weighing and packing systems that can deliver 20-
40% gains in productivity.

This presents a strong argument for going against the grain,
and investing tactically in a best-of-breed warehouse application.

With a specialist solution, operations management will be fully
empowered to deliver deeper, wider-reaching efficiencies.

From an IT perspective, this doesn't have to be bad news.

Having one big application handle every aspect of a business
sounds like the simplest possible IT strategy. But the fact is, the
bigger a system gets, the harder and more expensive it is to deploy
changes. This can be a major challenge for the IT manager who
has to juggle demands for change and stability. By contrast,
departmental solutions carry a smaller up-front investment, and
can be deployed faster with less upheaval and risk.

When the core systems of a business are not fundamentally
broken, there is often a good case for leaving well alone and
introducing some diversity into the IT portfolio.

Joined up thinking
Choosing the right system is important, however. A warehouse
management system must share master data with the core ERP
platform. It is important to ensure that any new investment works
with the open internet standards that allow systems to be
integrated easily. Then by following a joined up strategy,
companies can deploy the specialist features they need to make
their operations more competitive without compromising the
integrity of core ERP functions.

For example, allocating inventory to bin locations and
scheduling pick face replenishment are operational decisions that
have no impact in the back office. A WMS can manage these
functions and add new optimisations independently of the
backlog of enhancements scheduled for the ERP system.

Serial number tracking is another such capability. Again, a
WMS can automate stock picking and identification processes
while providing the batch traceability demanded by strict supplier
or regulatory requirements. This ability can be layered over the
basic inventory management
facilities of a legacy ERP system.

Newer innovations such as
voice-directed picking, which frees
up both hands for handling goods,
can yield a step change in
productivity. A modern WMS can
provide a cost-effective hub for
integrating new warehouse
equipment.

As the tough economic
conditions persist, these practical
innovations are the vital means by
which distribution and logistics companies can accelerate
operations, do more with the same or fewer staff and add more
value without driving up costs.

Putting the customer first
In a buyers'market, businesses must compete on quality of
service as well as price. Building a name for fulfilling orders on
time, every time depends on accurate stock-checking, efficient
picking and seamless packing and despatch. The cost of mis-picks
and returns handling is huge, damaging reputation and margins.

Targeted investment in warehouse technology can all but
eliminate manual handling errors and is an essential tool for
improving service and profitability.

Many businesses will find that a dedicated WMS provides the
optimal approach, removing the call for their ERP software to be
upgraded or modified. Commercially, this means a faster return
in investment from a smaller up-front cost. ERP users will
benefit too from a system that is more stable because it no longer
needs to be re-engineered.

As with many technology dilemmas, there is an element of
horses for courses. For a simple stockroom, 'ERP on a gun'may
suffice. But, for a growing business in a competitive market, the
ability to exploit every opportunity to move goods faster is
essential. Innovations like merged picking rooms and hands-free
technology are driving performance in warehouse operations
and IT managers need to respond by putting the needs of the
business and the customer
ahead of simplistic IT strategies.